In the context of significant socio-economic changes, the amendment of the Personal Income Tax (PIT) Law has become one of the key policies receiving special attention from the National Assembly and the Government. Recently, the Ministry of Finance released the Draft Personal Income Tax Law 2026, which introduces a number of innovations, most notably in the expansion of tax-exempt and tax-reduced income categories, as well as adjustments to family circumstance-based deductions. These provisions directly affect the rights of employees, household businesses, and professionals working in Vietnam.
This article, prepared by DNP Vietnam Law Firm, aims to provide reference legal information on notable changes in the Draft PIT Law 2026, helping employees stay updated on changes that impact their tax rights and obligations.
1. Categories of PIT-exempt income
Legal basis: Article 4, Draft PIT Law 2026.
Compared with the 2007 PIT Law (amended and supplemented in 2012), the Draft PIT Law 2026 has broadened the scope of tax exemptions by adding several new exempt categories, especially in priority sectors such as science and technology, the digital economy, green bonds, carbon credits, etc.
- Income from the first transfer of emission reduction certificates or carbon credits; interest and income from the first transfer of green bonds.
- Salary and wages from tasks related to science, technology, and innovation funded by the state budget.
- Income from legislative drafting activities.
- Income of investors, experts, and founders of innovative start-ups; and individuals contributing capital to venture capital funds.
- Income from copyrights arising from scientific, technological, and innovation-related tasks when commercialized.
- Income from the transfer of shares, capital contributions, or rights to contribute/purchase shares or capital in innovative start-ups.
- Post-corporate income tax profits of private enterprises and single-member limited liability companies owned by individuals.
- Income from government bond interest and treasury bill interest.
However, the Draft PIT Law 2026 removes the tax exemption previously granted for inheritance and gifts in the form of real estate among close family members (spouses; parents and children; in-laws and children-in-law; grandparents and grandchildren; and siblings).
2. Other categories of PIT exemptions and reductions
Legal basis: Article 5, Draft PIT Law 2026.
- Exemption from PIT on salaries and wages of foreign experts working in non-refundable ODA projects, NGOs in Vietnam, and Vietnamese nationals working at UN representative offices in Vietnam.
- A 2-year tax exemption followed by a 50% reduction for the next 4 years on salaries and wages of experts and scientists working at innovative start-ups, R&D centers, innovation hubs, and start-up support organizations.
- A 50% PIT reduction on salaries and wages of high-tech personnel working in enterprises and projects in high technology, IT, science and technology, innovation, digital transformation, and other priority development sectors.
These three new provisions demonstrate that the Draft PIT Law 2026 shifts the role of PIT policy from merely regulating income to serving as a tool for promoting the knowledge economy and supporting strategic sectors (ODA, start-ups, high technology). Compared to the 2007 PIT Law, this represents a significant and strategic expansion of tax exemptions and reductions, designed to attract experts, high-quality human resources, and to foster innovation.
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